What If Your Retainer Agreement Could Look Like This?

After reading this post at the Public Citizens Law & Policy Blog (H/T Legal Blogwatch) about simplicity guru Alan Siegel’s efforts to cleanse the gobbledygook from consumer agreements, my first thought was that if Siegel succeeds, then Minneapolis, Minnesota solo lawyer and bloggerGraham Martinwill have to find another topic to replace his Fine Print Friday feature, which parses and analyzes the fine print in consumer services agreements. But my second thought was why can’t we lawyers design our retainer letters for consumers just as Siegel has done in his example?

To be fair, many lawyers’ retainers letters are fairly uncomplicated – really too much so, if you look at some of the bar-sanctioned agreements at Soloformania. Others, like this one are more complex, though the terms are still relatively understandable. But none of these retainer agreements (my own included, and I will post some of those shortly) are particularly attractive: they look like something from a lawyer (which of course, they are!)

But what if we lawyers could take some time and design a retainer agreement like that designed by Siegel? Seems to me that consumers would find it more inviting, and less intimidating and as such, we could get off on the right foot in our relationship.

At the same time, would a simple document undercut our authority? Might consumers regard our services as less serious because our retainer letter didn’t come on fancy letter-head, with the formality of legalese? Or is this entire subject irrelevant anyway, because, as Enricho Schaefer has said, formal retainer agreements are outdated. Please share your thoughts below.

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This is a topic that is rarely discussed. My Retainer Agreements are tailored for the client's case, with some standard language that is included in all of them. I can tell you after 15 years of practice that after every case I think of a new clause to put in to an agreement. I also think of how to simplify the agreement. When clients ask (and you have no idea how many clients ask “what is a retainer agreement”), I always say “it's a document that basically says pay me and I'll represent you. My agreement is never more than 2 oe 3 pages. I've seen them go on and on and on and I think it just complicates the representation. One thing I think needs to be in every agreement, and I rarely see it (including in mine) are examples of the language used. For example – “non-refundable means that if you decide you no longer wish for me to represent you……”

What shocks me is how many lawyers take on clients and have no retainer agreement. I can't understand that at all.

I see many representation agreements that go on for 4 or 5 or even 6 pages, single spaced. I call these “barnacle” agreements. Every time the lawyer is unable to get a client to pay, the lawyer adds a new paragraph to the representation agreement to prevent those same circumstances from occurring again. So the first written communication that a client gets from a lawyer is a litany of all the horrible things the lawyer will do to the client if the client does not pay. Not a great way to start off the relationship.

But I don't think Enricho Schaefer's approach of having essentially no written agreement will work for very many lawyers other than transactional attorneys. When I worked for the Legal Aid Society back in the day, we required representation agreements in every case, even though the client was not paid any money. The agreement laid out for the client what their rights were in the representation –diligence, confidentiality, loyalty– and the circumstances under which the lawyer would withdraw. Representation agreements would be more consumer-friendly if they informed the clients of their rights. And clarity would save lawyers angst in the long run. You'll rarely see a client complain about a rep agreement that was too easy to understand.

Carolyn Elefant

Like Brian, I continue to update my retainer agreements – sometimes adding new clauses, sometimes deleting others. On one occasion, a client asked me to insert a clause promising that I would be responsive to client calls and requests for information. Admittedly, I'd never included something like this – I mean, why would I not be responsive? But apparently this client had previously had negative experiences.

The non-refundable clauses are very important, I think, as are grounds for withdrawal. As more lawyers adopt flat fees, and bars require lawyers to deposit and hold flat fees into trust accounts until the work is done, rather than treating them as earned upon receipt, I think that we will see fee agreements that specify at what points in a matter that a fee is deemed earned.

Because of my focus on estate planning & probate, I’m very focused on the issue of flat fees and about what becomes non-refundable at which point.

There are some elements of my work related to counseling when the highest value is being delivered (and that’s almost never at the delivery of the documents). I’ve structured my retainer agreement (and yes, I ALWAYS have one) so that a larger part of the fee is “earned” up front, as opposed to being non-refundable – and I’ve taken the time to explain in the retainer agreement (also under 3 total pages) how it was earned and when. Thankfully, I’ve never had anyone force an issue where the retainer agreement had to withstand scrutiny. In addition, I’ve been lucky enough to avoid having to reference it at all for payment – largely because the documents that they so desperately want don’t come until the end and after they finish paying the fee. (It’s also one of the reasons I don’t send out draft versions of my documents – for fear that they disappear before I get paid for that part of the work). But, it doesn’t mean that it won’t happen some day.

There is also the issue of future malpractice liability. I’ve tried to carve out, in the retainer agreement and in notes that I take, the type of advice I give and when. In New Jersey, there is privity of contract with the next generation in estate planning and I can stand for any mistakes after my “client” has passed away. It means I have to be more careful that EP attorneys in other states.

In short, I could never see doing away with retainer agreements. The formality of executing one assures me that I have a client (and reminds me that I’m their lawyer).

VJM

shg

Let's not forget some state quirks. In NY, non-refundable retainers are unethical. All representation resulting in fees in excess of $3000 require a written retainer. All retainers require dispute resolution language.

My retainers have long been sui generis, but that's the nature of my practice. There is only beneficial purpose to have a retainer, to make our respective obligations absolutely clear so that we can enjoy a useful professional relationship without subsequent issues over what's included in the representation and the cost. Any language that muddles the retainer defeats the point. After it's signed, it should (if we're doing our job properly) never come to mind again. If it turns out that there's a problem requiring someone pulling out the retainer, it's likely not about the terms of retention at all.

Carolyn Elefant

The state quirks, as you call them, are significant – and failure to comply could result in a potential loss of payment. Some states require certain disclosures for PI cases, NY, as you point out prohibits non-refundable retainers and written agreements for fees in excess of $3000. I certainly hope that lawyers realize that they can't rely on a generic form retainer agreement, because it may run afoul of state law.

This agreement is client-friendly for two reasons: the way it is written and the way it is designed.

As lawyers, we must constantly work to assure we are using what copywriters call “message to market match.” That mean, among other things, that we must write for our intended audience. When we're writing for non-lawyers, our language should be particularly clear (not that it shouldn't be clear in communications with judges or other lawyers). You can find helpful information about plain language legal writing a thttp://www.plainlanguagenetwork.org/Legal/.

The second element of readability is – believe it or not – graphic design. while retainer letters, other client communications and briefs shouldn't look like brochures, you can improve the readibility of your writing by understanding some basic typographic principles. Find out more at http://typographyforlawyers.com and in an article called Painting With Print, which you can find at http://papers.ssrn.com/sol3/papers.cfm?abstract….